Date:15/06/2004 URL: http://www.thehindubusinessline.com/2004/06/15/stories/2004061501820200.htm

Back ThyssenKrupp JBM lines up more auto clients — Plans to invest Rs 7 crore in capacity expansion

N. Ramakrishnan

The paint shop at ThyssenKrupp JBM factory at Ford Suppliers Park at Maraimalai Nagar, near Chennai. ThyssenKrupp JBM makes underbody chassis parts and supplies to Ford India Ltd. -- Bijoy Ghosh

Chennai , June 14

THYSSENKRUPP JBM (P) Ltd, which makes underbody chassis structured parts in its plant at Maraimalai Nagar near here, hopes to begin supplying these components to more automobile manufacturers in the country.

It is in discussions with some of them, according to company officials, who did not want to disclose the names of these manufacturers. At present, it supplies only to Ford India.

Mr U.C. Sharma, Director and CEO.

It will shortly start supplying a critical component to Honda Siel Cars India Ltd by 2004-end. The part is under development and after Honda validates it, ThyssenKrupp JBM will begin supplies. This will earn the company revenues of Rs 4 crore a year, according to Mr U.C. Sharma, Director & Chief Executive Officer, ThyssenKrupp JBM.

It is a small business, as Honda generally does not give a big order at the start. It evaluates the performance and then gives more business, according to Mr Paul Scott, Asia Pacific Business Development Manager, ThyssenKrupp Automotive Tallent Chassis Ltd and a director of ThyssenKrupp JBM.

ThyssenKrupp JBM is a joint venture between ThyssenKrupp Automotive and Jai Bharat Mills. ThyssenKrupp holds 74 per cent of the Rs 24.89-crore equity and JBM the rest. The company's plant is located at the Ford Suppliers Park, right next to Ford India's plant in Maraimalai Nagar. It has been supplying to the Ford Ikon and also exporting these parts to Mexico and South Africa, where Ford India sends knocked down kits of the Ikon. From 2003, it started exporting parts to Ford's plant in China.

JBM makes underbody chassis structured parts, cross members, control arms, torsion beam rear axle (all of which form the interior pressed metal of the car) and fuel filler assembly. The plant has a capacity of 55,000-60,000 sets.

The company, which inaugurated the plant in February 2001, has so far invested Rs 68 crore and plans to invest another Rs 7 crore during the year on expanding capacity. This will be mainly for putting in place facilities to provide more value addition in the parts it supplies.

ThyssenKrupp JBM has about 260 workers. The company has acquired another five acres of land in the same location to expand facilities as and when required.

Mr Sharma said the company hopes to end this financial year (October 2003 to September 2004) with a turnover of Rs 75 crore, up from Rs 66 crore it reported in the previous financial year. He did not want to provide details of profits apart from stating that it had broken even. Exports contribute about 40 per cent to turnover. With the automobile market witnessing a good growth and Ford India planning to introduce more models, ThyssenKrupp JBM expects a 10 per cent growth in turnover over the next few years. It hopes that it will be the preferred supplier of the parts it makes to Ford India for all the new models the company launches. It expects 90 per cent of its turnover to come from Ford India over time.

Asked about the company's strategy to supply to other original equipment manufacturers (OEMs) in India, Mr Sharma said that the company's aim was to get closer to the OEMs, as logistics was a major cost. However, setting up a plant near the car manufacturer's plant depended upon the business volume.